The lies told to sell the chump public on the necessity of enduring cuts to the social safety net are already at a breathtaking level. Where would you like to begin? The idea that big reductions in spending (going over the edge of the world off the fiscal cliff would be horrific, while only somewhat big cuts would be salutary? That Social Security “reforms” are necessary to fix the budget? Even former budget chief Peter Orszag ‘fessed up that one was not true. Or the favorite refuge of the Republicans, that raising taxes on the wealthy will hurt job creation. Ahem, we’ve pushed the low taxes model further than any other advanced economy, and the result is crumbling infrastructure, an overpriced and mediocre health care system, and record corporate profits combined with extreme measures to pay less to workers and a lack of new investment (the corporate sector has been a net saver since the early 2000s).

The propagandizing nevertheless has gotten so shameless it appeared to be time to point out particularly egregious examples. I thought it would be good to establish what the benchmark is and encourage NC readers to identify similarly outlandish examples (you can e-mail me with sightings at yves_at_nakedcapitlism.com, with “Fiscal Cliff Propaganda Watch” in the headline).

This illustration comes from Bloomberg and the headline, “I Laid Off My Own Son”: A Real Fiscal Cliff Story” is a howler. The fiscal cliff hasn’t even happened; the idea that businesses are engaging in extreme measures in anticipation of it strains credulity. And we’ll see, just as banks like blaming their current underwhelming profits on big bad government action, when blowing up their customers is the proximate cause, so too is this a case of long-standing business problems being repackaged to serve a favored political message.

Before we get further, the Bloomberg video got bonus propaganda points by virtue of being featured on the front page of the website. Casual readers would encounter the “See that fiscal cliff is already potent and terrible! Just imagine what January 2, 2013 will look like if we don’t Do Something!” without clicking through to see if the attention-grabbing claim had any foundation in reality.

The video presents a company, UHP Projects, that is under already under considerable stress by virtue of being a low skill defense subcontractor. It isn’t clear what else the company does, but it main business seems to have been spreading its non-stick tar on the decks of aircraft carriers. This is like being a polar bear: specialization of diet increases risk of extinction.

In general, being a subcontactor or supplier to major vendors is a vulnerable position to be in. The pattern in Corporate America has been to squeeze subcontractors on every axis of performance: profits, delivery times, quality levels. UHP Projects might have been relatively late to feel the pinch, since defense contractors tend to have rich margins (once you get a major contract approved, it’s a great sinecure), but it has come by virtue of reduced defense orders for his services.

At its peak, UHP had $15 million in revenue and 150 employees. They now have 50 to 75 employees and 30% of the business they once had, which he also characterizes as “very inconsistent”. It isn’t clear whether the 30% refers to his total revenues of just his defense work, since if it was 30% across the entire business, his employment levels haven’t fallen to the same degree as his revenues. The focus of the CEO’s complaints is that government decision-making hurts his business via its effect on defense orders:

We aren’t General Dynamics. We aren’t Lockheed Martin. So they have enough critical mass to be able to withstand decision making. We get hit with the same taxes and the same expenses that come with affordable healthcare, that come with capital gains tax increases [aside: what do capital gains taxes have to do with running an operating business?]. We have to pay those fees but we don’t have the money to withstand and maintain a presence the way we used to do.

So he doesn’t like that the government has become a less reliable customer? I’m highly confident private sector ones are even less reliable; that’s no doubt why his business was skewed towards defense in the past. And he attributes the reduction in demand for his services somehow the fault of the fiscal cliff, or Washington flakiness, as opposed to the fact that the navy is downsizing and aircraft carriers in particular are coming under some scrutiny? No, the fact that he faces more business costs means the government should be good to him and give him more orders. It’s subtler than the version you see from the financial services industry, but you can see an sense of entitlement here: the fact that he once had a good business means it should continue like that, changes in the wider world be damned.

The CEO claims he’s diversified and implies he has more civilian projects than before, but the it would be hard his revenue mix used to be 60% defense, 40% civilian, but now is the reverse: 60% civilian, 40% defense. But if you simply assumed his level of civilian business remained at the same level as of the peak, and reduced his defense revenues by 70%, his civilian business would be 76% of the total. In other words, his civilian business has fallen too, just not as severely

Consider this in this video:

From the narrator: “UHP employs a little under 75 people, making it one of 500,000 small businesses of that size, all of whom are waiting for Washington to make a decision on the fiscal cliff.”

“All of whom are waiting”? Really? That means each and every one. Please.

And the firing of the son? It’s at the end, the very closing statement, and not clear at all when it happened. In context was more an illustration that his business has become more fragile and contra the headline, does not appear related to the fiscal cliff.

Look how much unpacking a three minute video took. No wonder they think they can get away with this sort of nonsense. In the end, the Bloomberg headline is as credible, and much less funny, that the famous “the devil made me do it”:

The fact is that small businesses are very vulnerable to changing economic fortunes. If you read surveys of small business sentiment, they’ve become pessimistic. From a Gallup survey published November 30:

Small business owners were negative about the current operating environment (that index went from -1 to -10) and particularly negative about the future:

The decline in small-business owners’ future expectations is disproportionately responsible for the plunge in the overall index. Owners’ expectations for their financial situation, cash flow, capital spending, and hiring over the next 12 months all worsened significantly in November.

One in five small-business owners (21%) expect the number of jobs at their company to decrease over the next 12 months, the highest percentage Gallup has measured to date.
One in three owners (34%) expect their company’s capital spending to decrease over the next 12 months — the highest recorded since July 2010.
Thirty percent of owners expect “poor” cash flow over the next 12 months — the highest Gallup has measured to date.
Twenty-eight percent of owners expect to be in a “poor” financial position 12 months from now — the highest Gallup has measured to date.

So while Bloomberg is correct to suggest that small business owners are nervous, it’s due to a weakening of the economy that is already underway, as the deterioration in current conditions attests. Gallup underscores this by flagging budgetary action (or inaction) as having the potential to make matters worse:

One of the more stunning aspects of the November survey results is the decline in small-business owners’ optimism for the future. As entrepreneurs, small-business owners tend to be optimistic by nature, and relatively more optimistic about the future than the present. Given this context, owners’ increasing pessimism toward their future not only reflects uncertainty, but also may imply a weakening economy going forward…

Overall, the Wells Fargo/Gallup Small Business Index survey results suggest the U.S. economy is extremely fragile — and possibly susceptible to another recession. Policymakers need to keep this acute fragility in mind as Washington struggles to avert the “fiscal cliff.”

So back to the Bloomberg blame-shifting piece. I hope readers will keep their eyes out and flag shameless cases of fearmongering and distortions, either in comments or by sending particularly brazen examples to me as being vilification-wothy. This is a target-rich environment, so I expect you to find lots of material!

I hear what you’re saying, and most of this stuff is ridiculous. Full disclosure: I’m a libertarian. But I’d like to hear what you think about this article by Steve Forbes on how Boehner should man up and address the situation:

Forbes is clueless as to how a nation’s economy functions. His model of the nation’s economy seems to be that of a household or company that cannot have its own currency supply and credit supply regulated by a central banking system, the Fed. All other errors proceed from this wrong headed model. A household can banish a member. A company can layoff an employee. A nation cannot do that.http://www.wisegeek.org/what-is-keynesian-economics.htm#slideshow

I can remember a time, when I was a teenager in the 1960’s, that Republicans had a reputation for fiscal responsibility. Forbes is just another example of how the current crop believes that money goes on trees, health care and education cost nothing, and government employees (including soldiers and sailors) work for free.

I reject the premise that somehow my income is the government’s, and that they should be able to take what they deem necessary. Has it come down to “You’re rich, quit complaining that the bully is stealing your lunch money.”

Let’s get rid of the government altogether. Then those of us who think you have more than you need will just come and take it. At some points in history, the rich have been viewed as nice lamppost decorations.

How do you think the rich get rich? If they invested, where did they get their starting capital? If they created a business, who built the roads so people could get to work? Who provided public services so workers could survive?

Are you really so divorced from reality that you think someone like Mitt Romney and a farm worker have equal opportunities?

I’ve been mulling over that “externalities” thing all morning – that concept is just toooooooooo complicated – it hides The Fact that these corp-0-RAT welfare pig$ on the top dump their costs on US, so that they can live on tops like pigs.

everything costs – and the pigs on top have all their b-school toadies and their econ proffs cranking out bigger and better justifications for dumping the costs and hiding the costs – and we know no – bodies got union bureaucrats and k-school wannabees cranking out obscure obtuse hand wringing diaper wetting excuses for losing – cuz wannabees and bureaucrats ain’t getting the skills in finance, accounting, stats, engineering (math, math, math, math) to figure out all the dumped costs and hidden costs and shove the lies justifying the dumping back into the dark holes the lies come from.

The answer lies in the Monty Python’s satire of “What have the Romans ever done for us?”
Reg: All right, but apart from the sanitation, medicine, education, wine, public order, irrigation, roads, the fresh water system and public health, what have the Romans ever done for us?

Off-Leash either you stop your whining, play and put you ante into the kitty or fold.

Technological change, market conditions and global supply chains can invalidate a small company product/service in a few years or less in some cases. That’s the dilemma of many small business people. This clip is meant to tug at the heart-strings of other small business owners. That is its true evil.

The man’s company is less the victim of regulatory/worker policies than other economic conditions which are beyond his control. We only see his few remarks that the film editors want us to see.

Incorrectly ascribing policy and lingo is actually the fault of film and news editors – who typically are employed by large corporate entities. They are powerful in pushing a particular interpretation.

Last night, watching Judy Woodruff on PBS News Hour, she adopted the lingo of “entitlements” for social security benefits and she could not stop applying the word. Her guest kept gently reminding her that social security was actually a benefit that people had paid for over their working lives (in FICA taxes) and that the program had not caused the US deficit, but had contributed surplus funds. I like PBS but felt Judy did not do too well in this interview, lacking in neutrality.

Social Security is an entitlement. You are entitled to that money. She should have smacked the guest around for possessing a poor vocabulary. A benefit is a plus or a perk, but it is not something one is entitled to. A benefit has to be provided, but the entitlement works just fine without Congressional interference.

I am thinking there are 2 ways to approach this – one says we must force use of another word e.g. “No, it’s NOT an ‘entitlement’! It’s a (fill in the blank)” And the other is to refuse to let the opposition take over the meaning of a perfectly good word, e.g. “You’re damn right I’m entitled to it! I paid for it! Don’t you think you are entitled to something you paid for?!” SS may be several things, but an “entitlement” it definitely is, IMO ….

I used to think it was a good idea to try to change the term, but now i am not so sure – maybe the best defense is a good offense – maybe its time to take words away from those who would denigrate them, and return them to respectability …

I ran into this issue over at CD (Common Dreams, where i use to hang out – tell you what, if you can fix my problems with Disqus over there, I’ll go back there and leave you guys alone :)) I used to call myself a “liberal”, but that word was trash among those with whom i felt i had some political/philosophical affinity, so I switched to “progressive” as a descriptor and the same thing has happened to that apparently. Frankly i am getting a bit sick and tired of having to abandon what are, IME, perfectly good words because someone snickers or snarls or “snarks” when they use them ….

I am not sure where I will wind up here – but defending “entitlement”, as in, “the fact of having a right to something” is looking better and better to me … look it up in the dictionary ..

So who owns words and what they mean? I understand the difference between connotation and denotation and i understand that some words have become so heavily weighted that any attempt to “redeem” them may well not be worth the agony or energy, but methinks we ought to fight this tendency when we see this starting to happen or we will lose the use of more and more words …

When having a discussion about academic, technical, or esoteric issues, one is expected, as much as possible, I realize, to use the proper “terms of art”, but with regard to every day affairs, ISTM the opposition has taken so much of so much already, I’ll be damned if i will let them take any more words!

(As is obvious by now, i use as many words as i can, whether i need them or not – but will neither claim nor cede any property interest in them – :))

Exactly! Post-structuralism theory states language (expressed in “words”) have no stable meaning. According to Saussure–there is no necessary or historical limited relation between signifier (the word: entitlement) and the signified/concept/meaning of (entitlement) which is slippery and unstable.

Literary criticism applies Deconstructionism. A critic takes aim at what is assumed as a stable relation in a word/text meaning by identifying the frame of reference, then demonstrates the questionable stability of that frame of reference by presenting your argument to unseat your opponent.

The doomsayer republicans insist that “entitlement” has only one meaning and it’s theirs. I’d say they’re entitled to their opinion but question their stability….

To my understanding, ‘entitlement’ is an obscure federal budgeting term that refers to spending that is already committed to with existing legislation and requires no new act of congress to be spent annually – so yes, by this term, social security is an entitled part of the budget. To constantly call social security ‘entitlement spending’ without explaining what the term means and implying correlation with a spoiled-brat society that just expects the government to do everything for them is just effective right-wing PR branding.

According to right-wing dezinformatzia “entitlements” is dog whistle for “welfare”. There are probably quite a few Social Security/Medicare recipients out there ready to applaud “entitlement cuts” (believing that they’ll hit that mooching freeloading 47%) all unaware they they’ll be the ones getting shafted.

I’m glad you mentioned that. It’s true of print and TV as well. We normally blame the reporters, but the people most responsible for the “both sides do it” and other atrocities are the editors. They choose the assignments to hand out and then change the copy the reporters submit. I’ve been trying to remember the name of the book, back during Vietnam, that pointed out how the editors at Time and the Washington Post and the New York Times were the ones mostly responsible for choosing the narrative coming from Washington over what their reporters were sending them from the field. Of course the editors were doing that because the publishers wanted them to. Henry Luce was particularly open about propagandizing.

Yves, I think it’s crap that his no good son, daddy got him a job, sent him to some press mechanics training (what about other workers? were they not up to the same level of incompetence as the son?), and then laid him off. So daddy gets kickbacks from paying unemployment and he gets to write off as a business expense the cost of sending his kid to trade school! WTF?
I was an accountant for a small business firm. I saw a lot of family businesses. I saw a trend of baby boomers following in the family business, yet the children staying out of it and pursuing other career avenues, through college. And if guy is gonna be affected by the fiscal cliff, he needs a new CPA. I would ballpark that on $15 million in revenues, he barely drew 250k. What he doesn’t like losing is all the perks; having all his personal bills paid for by the business. He can hand in his credit card statements each month and have the business pay the bill. This lowers his business taxes (also allows him to tell employees “sorry we don’t have the money for raises”) as well as gives him more personal cash to look like a big shot.

The Time article posted yesterday is important and its message bears repetitious public exposure, so I applaud them on this.
Sadly, this is NOT news but more a demonstration how the Warfare State propagandists are so effective at killing realistic assessments when they are contrary to the congressional district corporate welfare fodder..

MUCH of the conventional Navy is a case study for the military legacy of equipping to fight the last war, and the dupes that keep throwing misallocated resources in this hole are truely the unpatriotic sots that are dragging this countries Economic National Security anchor as we drift into teh reef.
The Pentegon has IRONICALLY become perhaps the ultimate example of central planning mis-allocation of investment resources. All of the programs that lack efficecy are essentially stealing resources from productive alternative use.

Rather, the U.S. Navy was, and is, structured to fight the imperial Japanese Navy. That navy’s main strength was its aircraft carriers, and aircraft-carrier task forces or “battle groups” remained the focus of the U.S. Navy throughout the Cold War and into the present. From the Soviet navy’s perspective, American aircraft carriers were
little more than targets for submarine attack. When Adm. Hyman Rickover, a fierce proponent of building nuclear-powered carriers, was asked in a Senate hearing how long those carriers would survive in a war with the Soviet Union, he replied, “About two days.”

When the last trumpet sounds and the Japanese carriers sunk at Midway – Akagi and Kaga, Soryu and Hiryu – rise from their watery graves, the U.S. Navy will be ready and waiting…

F-22 is nothing more than an abstractly expensive hole digging and filling exercise.
The Bell Boeing V-22 Osprey? I wouldn’t even want to go for a ride in oneunder the best of circumstnace! A tragically absurd money pit

First, as your link and book so clearly points out, wars can be classified by type (1GW, …4GW), so generals do not fight the last war, they fight the war they think will happen, which usually, they think, will be like the war they previously fought, but only with better/different weapons. So it would be more accurate to state that generals fight their own generational war (the US’s is 2GW).
Second, and more important, let me say that I found the intro to the book, America’s Defense Meltdown, to be most helpful in clarifying some observations I have had over the years of reading military history. I haven’t read the entire book yet, but I must applaud your linkage. Just another reason why I read NC and give a bit of my treasury to keeping it going.

Well, you’ve surely heard by now about the fellow in Arkansas who, wracked with distress about the uncertainty attendant to the Fiscal Cliff Crisis, bought an AK-47 at his local Wal Mart and then gunned down 17 employees in the plant parking lot early this morning. As the businessman, Jim Ralph Gurney of Little Rock, was led away in handcuffs by police, he was heard to mutter “Damn, my buliding is the next one down the road. Sheeit.”

Line before last of 1st paragraph: should it not be “…extreme measures to pay LESS to workers” ?? Has to be a typo
nb: I have been coming to NC for at least 5 years and it feels,somehow, like home. Up with Yves and cats !

One thing no one EVER talks about is, what is the right mix of big medium and small businesses that would ensure an ideal market for everyone. We currently have only humongous companies and tiny companies in the USA. This translates to a kind of universal oligopoly where tiny companies are constantly driven out of business by the big elephants. This is not good in terms of any perspective. The FTC bars mergers only when two companies have become too humongous with no one else in the marketplace. GE bought Honeywell and it was thanks to Mario Draghi in EU that the sale was blocked. Employees especially get a raw deal when companies are too big and too few. There is no employer choice for workers. It would be nice to hear some expert speak about this issue.

It’s hard to overstate just how effective this blitz of propaganda is. Say “entitlement” with a sneer, repeat it in unison every 3 seconds over the whole spectrum of MSM propaganda outlets and it becomes an absolutely convincing dog-whistle for welfare as @Sufferin’ Succotash points out above.

The most grating yapping to my ears comes from people like Anderson Cooper (responsible hint of liberal) who are so condescendingly adult about burying the safety net. He hammers Republicans for being too whacked out but praises Democrats for saving the safety net by raping it softly with their love.

A secondary point is that PBS news is hard right wing now, they are no longer just drifting that way. They are a hard core porn machine for right wingers with degrees and progressives with empty attics with the single exception of Bill Moyers. Judy Woodruff is shameless, really really shameless, but the sad fact is a lot of well educated “liberals” including doctors and lawyers respect her and assume they are getting balanced opinion and facts from her in particular and pbs in general.

People who think they are crossing the line into being too cynical are wrong. It really is that bad out there, and there is precious little good news on the horizon as far as the safety net goes (or civil rights, or woman’s rights, or worker’s rights, or whistle blower’s rights, or everyone’s rights to a livable environment, or …).

Can anyone define exactly what a small business is? The number of employees? The amount of revenue? Or whether it actually produces something or just moves money around? I believe it was Thom Hartmann who said that the cliffers who complain about raising the tax rate on 250K plus incomes are referring to brokerage house, law firms, etc as small businesses. Plus they neglect to mention that the taxes are on the net, not gross income. Seriously, is there a definition of “small business?

A woman i know works for minimum wage at a part-time, no benefits job. She carries thousands in debt from a poor education at a for-profit diploma mill currently under federal investigation. She remarked the other day that putting too much taxation on business would inhibit their capacity to hire workers. I did my best to explain how this is utter bullshit, without insulting her limited understanding. This is what we’re up against.

You are not up against her. She has no power. You are up against the people with power, and the ones with microphones, not we little people.

To wit: even when us ittle people agree, on a majority-basis, like on wanting single-payer healthcare (which we do, polls show this going back years and years)… nothing happens. Getting agreement among the powerless achieves nothing. It’s getting to the people in power that makes things happen.